EBay launching authentication service to fight fakes

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Dive Brief:

Later this year, eBay will launch eBay Authenticate, an opt-in, fee-based service enabling sellers and buyers to have merchandise authenticated by human inspectors.

EBay Vice President of Consumer Selling Laura Chambers, who is leading the new program, said in a blog post that Authenticate is limited to certain types of merchandise, like high-end handbags, and buyers can pay for the service whenever a seller declines to do so.

But while many manufacturers, in particular upscale brands, have complained about the abundance of knockoff watches, shoes and handbags sold on digital marketplaces like eBay, Alibaba’s Taobao and Amazon, there’s also a “vast counterfeit universe of auto parts, cosmetics, drugs, electronics, sporting goods, toys, and more, according to watchdog group The Counterfeit Report.

Dive Insight:

There have always been fakes of popular brands sold on the street, but the rise of e-commerce has made the practice nearly seamless — much to the consternation of brands. Savvy shoppers can spot a fake quite easily when it’s in their hands, but marketplace sellers often use a brand’s own images of the real thing to make their sales.

The problem recently landed Alibaba’s Taobao marketplace back on the U.S. Trade Representative’s list of Notorious Markets for 2016. And as Amazon’s Marketplace has grown — half of the goods sold on its site are now from third party sellers — so has counterfeiting. The e-commerce companies under fire appear to be trying to fight the issue on various fronts, using technology, lawsuits and revamped seller requirements, but the challenge persists. Amazon has taken a number of steps to mitigate that, including suing sellers, instituting brand-gating fees, and banning offending sellers from its site; Alibaba has touted its "big data" approach and its work with law enforcement, and also recently took sellers to court.

But knockoffs remain rife on eBay, according to The Counterfeit Report, which tracks the trend across several e-commerce sites. Last year, The Counterfeit Report identified more than 2.6 million counterfeit items on eBay and reported over 1,743,890 to eBay for listing removal; more than 331,300 of those had already been sold to eBay consumers, according to a report emailed to Retail Dive. “While the sellers usually remain and may relist, the deceived eBay buyers are never told by eBay they received a fake and may be entitled to a refund,” the Counterfeit Report said, adding that it actually bought and received more than 2,300 counterfeit products from eBay sellers, including items sporting fraudulent trademarks. (eBay has recently blocked all of The Counterfeit Report's accounts, according to the watchdog.)

EBay believes Authenticate is a step in the right direction. “For buyers, the service adds another layer of trust to allow them to shop confidently,” eBay's Chambers said in her blog post. “And for sellers, the service will be most beneficial for those who are looking to part ways with their high-value items, but don’t necessarily have a long established selling history on eBay. For our more established sellers, the service may not be as meaningful given they’ve likely established a trusted reputation, but it will certainly be available to all sellers.”